What you need to know before taking out student loans

Posted on May 5th, 2016

Your student loan debt can affect your credit, which affects whether you’ll be able to buy a car, house or take out a loan in the future.

But a new study shows nearly half of all student loan borrowers don’t know that, according to CNBC.

Before taking out student loans, it’s important to educate yourself about the types of student loans and understand how interest and repayment work so that you can put yourself in a good position to repay them in the future.

Three student loan mistakes to avoid

This video from CNBC breaks down three major student loan mistakes to avoid at all costs.

The mistakes they tell borrowers to avoid include:

1. Not filling out the FAFSA. As we’ve written previously, filling out the FAFSA is necessary to receive state and federal financial aid. If you don’t fill it out, or if you fill it out too late (many colleges have deadlines between January and March), you risk missing out on free money for college, including grants and scholarships, as well as programs like work study and lower-interest federal student loans.

2. Not looking for scholarships. We’ve stressed the need to be diligent in searching for scholarships and other forms of aid. The more grants you can win, the less you’ll have to take out in student loans, which will put you in a better financial position for the future.

3. Waiting until graduation to think about repaying student loans. As we’ve expressed, it’s crucial for students to know what they’re getting themselves into by taking out student loans before they even step in a classroom. When deciding on a college and considering how much money they’ll have to take out in student loans, students should consider their future salaries based on their college and major, as well as other plans for after graduation, and use a student loan repayment calculator to determine whether they’ll be able to afford their monthly payments.

How to reduce your student debt

We’re big proponents of minimizing your student loan debt to avoid being bogged down by interest rates and high payments in the future. That’s why we work with students and families to help match students with affordable colleges and maximize their financial aid packages.

But if you’re already dealing with student debt, we can work with you to get it under control and reduce your monthly payments and determine whether student loan refinancing┬ámakes sense for you.

If you’d like to learn how we can help you reduce your student loans or pay for college without taking on enormous debt, give us a call at 1-888-234-3907 or contact us using this form.

Category: Financial Aid

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